The 10-second takeaway
For the quarter ended June 30 (Q2), CEC Entertainment met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded. Non-GAAP earnings per share expanded significantly. GAAP earnings per share grew significantly.
Margins grew across the board.
CEC Entertainment recorded revenue of $191.9 million. The two analysts polled by S&P Capital IQ expected net sales of $191.1 million on the same basis. GAAP reported sales were 5.2% higher than the prior-year quarter's $182.4 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
EPS came in at $0.43. The three earnings estimates compiled by S&P Capital IQ forecast $0.33 per share. Non-GAAP EPS of $0.43 for Q2 were 34% higher than the prior-year quarter's $0.32 per share. GAAP EPS of $0.42 for Q2 were 83% higher than the prior-year quarter's $0.23 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
For the quarter, gross margin was 56.8%, much better than the prior-year quarter. Operating margin was 7.1%, 110 basis points better than the prior-year quarter. Net margin was 3.8%, 160 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $204.0 million. On the bottom line, the average EPS estimate is $0.50.
Next year's average estimate for revenue is $834.6 million. The average EPS estimate is $2.86.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 73 members out of 93 rating the stock outperform, and 20 members rating it underperform. Among 44 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 34 give CEC Entertainment a green thumbs-up, and 10 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on CEC Entertainment is hold, with an average price target of $38.00.
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